The government has assured state banks it is ready to provide capital support as the coronavirus pandemic may lead to a surge in bad loans when economic growth is slowing, three government and banking sources told Reuters.
New Delhi may need to make a provision of at least ₹20,000 crore to ₹25,000 crore for capital infusion in state-run banks. However, this number can increase significantly as the situation evolves, the officials said. "The NPAs (non-performing assets) could remain an issue and the government may need to make a provision for some capital infusion in the public sector banks," said a senior government official with direct knowledge of the issue.